The introduction of choice has resulted in Australia’s superannuation system providing unprecedented flexibility (through increased investment options and the timing choices) for members to optimise their expected benefits. This paper examines the impact of switching between investment options using a normalised ranked return or “roulette wheel” approach developed by Bauer and Dahlquist (2001) for the Australian setting. The paper tests various switching strategies for both single-sector and blended options, for the period 1985–2005, finding that members require forecast accuracy of around 70% to be successful at market timing. Finally, the paper considers the impact of switching strategies on accumulated balances.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: 12 Date of creation: 01 May 2007 Date of revision: Handle: RePEc:qut:dpaper:216
Note: Michael E. Drew is in the School of Economics and Finance, Queensland University of Technology. The author acknowledges the financial support of the Australian Research Council’s Discovery Project funding scheme (#DP0452336, “Modelling the Risk of Defined Contribution Superannuation Plans”). The editorial contribution of Hazel Bateman (Guest Forum Editor) is sincerely appreciated, as are the comments from two anonymous reviewers. All remaining errors are the sole responsibility of the author. Contact details of provider: Postal: GPO Box 2434, BRISBANE QLD 4001 Email: Web page: http://www.bus.qut.edu.au/faculty/schools/economics/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Dr Vlad Pavlov).
Related research
Keywords:
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: